Old Man Tech to New Digital Moguls: Beware the Power of Government

When Bill Gates says you’re tempting fate, best to listen

Screenshots from what became a disastrous deposition of Microsoft CEO Bill Gates in 1998

Bill Gates was the Mark Zuckerberg of the 1980s and 90s. Microsoft in the late 1990s owned the tech world. It was an unmitigated monopoly in computer operating systems, poised to do the same in the Internet and web browsing markets. But then it tangled with the US government. A bruising legal battle with the Dept. of Justice culminated in a humbling settlement in 2002. As it licked its wounds and considered how to operate in a post-settlement world, Microsoft missed the search revolution, ceding it to Google, missed the mobile revolution, ceding it to Apple, and missed the social revolution as well. Given all those misses, it’s that much more remarkable how healthy Microsoft’s business is today — it remains a major force in tech, particularly in enterprise, an area where its FANG rivals have mostly whiffed.

So when Gates uses his most potent current platform — the release of his annual Gates Foundation letter — as an opportunity to warn his industry of its blinkered arrogance, well, the man knows of what he speaks. He’s lived through through the government ringer, he’s been the blinkered tech icon who thought he was smarter than the rest of the room, and he’s lived long enough to realize the error of his ways. Given the moment in which our industry finds itself, Gates’ admonition is both poignant and timely.

Here’s his money quote: “The companies need to be careful that they’re not … advocating things that would prevent government from being able to, under appropriate review, perform the type of functions that we’ve come to count on.” Asked if he sees instances of that now, Gates replied: “Oh, absolutely.”

Speaking of how government and tech get along, China is always a fascinating counterpoint to the regulatory environment in the US. This Bloomberg piece lays out examples of how China’s tech giants live and die at the pleasure of a fickle master. MQ: “There are real questions, however, over the degree to which features nurtured in an environment where official dictates take precedence over the desires of shareholders and customers can succeed globally. Some innovations may not be pursued for fear of offending government sensibilities. Those that are might be viewed as lacking the robustness of features found in similar products abroad.”

IBM is betting big on blockchain, and if the bet pays off, it could be transformative for Big Blue, which has struggled to grow its business over the past few years. MQ: “So far, IBM has managed to capture 32% of the market for businesses using blockchain technology, which is a market now worth $700 million, according to Wintergreen Research. That’s more than any other company doing blockchain for business, the research firm found, though still only a fraction of the total $79 billion IBM recorded in sales last year. While overall sales were down 1% from the previous year, revenue for the division that includes blockchain initiatives climbed 11%.”

As tech impacts society, society finally begins to fold back on tech. So it is with academia, which is rushing to teach its young computer scientists that their profession has significant ethical considerations. MQ: “The idea is to train the next generation of technologists and policymakers to consider the ramifications of innovations — like autonomous weapons or self-driving cars — before those products go on sale.”

Oh lord. Here we go again. Will Facebook et al be ready? I don’t sense so. MQ: “”We’ve had more than a year to get our act together and address the threat posed by Russia and implement a strategy to deter future attacks. But we still do not have a plan,” Warner said.”

*Sue Desmond-Hellman, CEO of the Gates Foundation, is speaking at the Shift Forum in 10 days. So is Michelle Peluso, CMO of IBM, and Adam Mosseri, head of News Feed at Facebook. Join us — there are just 20 seats left!